sebi:Order/SBM/AK/2021-22/15555

SEBI · SEBI · 2021-02-18 · Suresh B Menon, Adjudicating Officer

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Facts / Headnote

Violation of Regulation 27 established; penalty of Rs. 5,00,000 imposed on the Noticee

Provisions invoked

• s. 15A
• s. 15
• s. 15J
• s. 28A

Regulations

• Reg. 27

Parties

• Axis Bank Limited – Merchant Banker

Holding

The Noticee violated Regulation 27 of the Merchant Bankers Regulations by failing to submit complete particulars of acquisition of securities in 9 public debt issues within fifteen days, and is liable for a monetary penalty of Rs. 5,00,000 under Section 15A(a) of the SEBI Act.

Full text

___________________________________________________________________________ Adjudication order in respect of Axis Bank Ltd- Merchant Banker Page 2 of 11 transactions. It is alleged that Noticee has failed to submit the said information to SEBI in respect of the 9 public issuances of debt made by the companies during the above mentioned Examination Period.

___________________________________________________________________________ Adjudication order in respect of Axis Bank Ltd- Merchant Banker Page 3 of 11 c. It is alleged that Noticee has violated the provisions of Regulation 27 of Merchant Bankers Regulations and therefore, adjudication proceedings have been initiated against the Noticee under the provisions of section 15 A (b) of the SEBI Act.

___________________________________________________________________________ Adjudication order in respect of Axis Bank Ltd- Merchant Banker Page 4 of 11 a. The Internal Audit Department ("IAD") of the Noticee submitted their report on August 9, 2019, and the Noticee came to know that in 9 Public Debt Issues out of total 22; it had also invested in securities as well as acted as Merchant Banker between, August, 2016 and August, 2019, but had inadvertently omitted to report the same to SEBI within 15 days from date of investment. Vide email dated December 30, 2019, the Noticee informed SEBI about the said omission. Thus, the Noticee acted in a prompt and diligent manner to immediately inform SEBI regarding the omission. Furthermore, the Noticee has revised the processes and monitoring related to complying with provisions of Regulation 27 of SEBI (Merchant Bankers) Regulations, 1992 in order to ensure that such omissions do not take place in the future. Thereafter, no such omission has taken place. b. It can be seen that the said 9 issues constitute only a small proportion of the total activity. Furthermore, these 9 issues are spread over a period of 3 years with 3 issues in a given year., the contribution of the Merchant Banking activity (Rs. 381 Crores) of the Noticee to its total income of FY 19-20 (Rs. 78,171.72 Crores) is around 0.49%. c. The Noticee submits that the omission may have occurred because the DCM handled both Merchant Banking and Investment functions for the Ba

Source: SecMarx — sebi:Order/SBM/AK/2021-22/15555. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.